Harvey Entertainment Company announced that The Chase Manhattan Bank is arranging a US$25 million, five-year revolving credit facility and that Harvey has completed the acquisition of 100% of the capital stock of PM Entertainment Group Inc., an independent entertainment production and distribution company. The PM Entertainment Group purchase consisted of $6.5 million in cash and $1.45 million in Harvey Entertainment Common Stock paid at closing, as well as a $2.05 million subordinated note, payable over the next five quarterly periods. Part of the deal is being financed by Harvey's new revolving credit facility which is secured by substantially all the assets of the company and replaces an expired $2.5 million facility with City National Bank and a PM Entertainment facility with Imperial Bank. With annual revenues of approximately $25 - $30 million, PM Entertainment is a privately owned producer and distributor of film and TV in the U.S. home video, television and Internet markets, and internationally in all media. PM Entertainment's library consists of over 150 films and 2 TV series. As part of the agreement, Harvey has a two-year option to buy the Sunland, California-based production and post-production facilities of PM. PM Entertainment will be a subsidiary of Harvey Entertainment, under the direction of George Shamieh, PM Entertainment's president. Richard Pepin and Joseph Mehri founded PM in 1986 and George Shamieh joined as the third partner in 1988. PM Entertainment produces and distributes the TNT series LA HEAT; serves as the distributor of HOLLYWOOD SAFARI to the Discovery Channel; and is a top supplier of programming for HBO World Premier movies, USA Network and other broadcasters. Roger Burlage, Chairman and CEO of Harvey Entertainment, commented, "The PM Entertainment acquisition provides a variety of important strategic benefits to Harvey, including the expansion of our entertainment library. Combining the revenue and cash flow from PM Entertainment, while taking advantage of overhead, distribution and production efficiencies, should allow Harvey to accelerate the pace of its growth and return to profitability." George Shamieh, President of PM Entertainment said, "We're delighted to join forces with Roger Burlage and his high caliber team of entertainment industry executives. The combination of Harvey and PM Entertainment merges a broad range of unique but complementary strengths within a publicly traded entertainment platform. The combined companies can now leverage Harvey's access to capital and expanded management team to support a range of affiliated businesses including character licensing, entertainment production and distribution and the exploitation of our collective entertainment library."
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